Should accountants call time on timesheets?
17 February 2020: love them or hate them, timesheets remain one of accountancy’s greatest talking points. Della Hudson speaks to Jessica Pillow about how they use timesheets in their respective practices.
The thorny issue of timesheets continues to divide opinion in the practice world. Some firms swear that scrapping them was the best thing they ever did, while others continue to question how practices without timesheets can know that their charge-out rates and fees are profitable.
When I ran my own practice, Hudson Accountants, we used timesheets but in quite a specific, top-level way. Jessica Pillow, founder of Pillow May and renowned technophile, also no longer uses timesheets systematically.
As most of the Pillow May work is done on a fixed-fee basis, they are not required for billing purposes. In fact, she is a firm believer that focusing too much on time can stifle creativity as the team is too busy racing to get the job done rather than looking for additional ways to help clients.
Does this mean that Pillow May doesn’t record time at all?
Not necessarily. Certain open-ended jobs, such as specialist tax planning, are billed on an hourly basis because it is not possible to agree a fixed fee in advance. Time is recorded for these but most accounts work is fairly well-defined, so time is much easier to predict for a fixed fee.
At Hudson Accountants we did use timesheets but rounded to the nearest hour to give a broad idea of whether work was being completed in the expected time and which clients or work were most profitable. This meant that we could adjust our marketing to attract more of the right sort of client and also know when we were growing enough to take on a new member of staff.
Anyone who has worked with timesheets will know how much time is spent trying to balance the records while avoiding coding everything to “admin” or whatever the internal code is. I estimate that, as a trainee, I probably spent half a day per month on this non-profit-generating task. It doesn’t need a particularly big firm for this to become the equivalent of an extra employee.
Should we all ditch the timesheet?
Jessica Pillow believes there may be a value to timesheets in a larger firm where managers are often more removed from their staff but is this really the best way of managing a team?
They may also be of use when managing a remote team, which is why we used them at Hudson Accountants.
Are alternative management tools out there?
Timesheets are often incorporated into practice management software and some can track which client the accountant is logged into, but they don’t easily allow for multitasking. How many people talk to one client on the phone while scanning receipts for another? And how much work gets done while on hold with a tax query?
If a firm isn’t using timesheets what happens when there is a problem? And do they even know if there is a problem?
Jessica and her team keep it simple, as they all plan at the start of their week using time slots on their calendars based on the expected duration of each job. At the end of the day, they can adjust their calendars to reflect how their time was actually spent.
The system is dependent upon the individual to flag if there is a problem, which relies on a culture of openness and trust. One way to build this atmosphere in firms is to set budgets for the team and not for individuals. This led to a more relaxed but professional culture at both Pillow May and Hudson Accountants.
So while there are processes and tools that can cut down the amount of timesheet-based admin, and in some cases eliminate their systematic use, this doesn’t necessarily spell the end of recording time altogether – particularly for larger firms with more moving parts.